Marginal analysis a firm to determine a) minimum production level necessary to pay debts b) ratio of marginal cost to marginal revenue c) most equitable allocation of a firm's resources d) price and quantity production levels to maximize profit

Marginal analysis is really important for a firm. Marginal analysis helps a firm to determine the most equitable allocation of a firm’s resources.  

EXPLANATION:  

Marginal analysis is an assessment of additional benefits of a firm activity, compared to the additional costs which are incurred by the exact same firm’s activity. A firm or company applied marginal analysis to make a decision which helps a firm to maximize the potential profits and benefits. The example of marginal analysis is when the firm’s cost to produce one more appliance or the profit gained by adding one more worker.  

In microeconomics, marginal analysis is applied to analyze how a compound system being influenced by marginal manipulation of its comprising variables. On this occasion, the marginal analysis focuses on investigating the results of small changes as the consequences cascade across the business as a whole. The goal of marginal analysis is to investigate whether the costs associated with the change in activity will affect in a benefit which is sufficient enough to offset a firm. The whole impact of marginal analysis is on the cost of producing an individual unit which is most often observed as a comparison’s point.  

LEARN MORE:  

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

1.Marginal analysis helps to? link  

2.A command economy tends to exist under a link  

KEYWORDS: marginal analysis, economy analysis  

Subject: Business

Class: 10-12

Sub-chapter: Marginal Analysis